Why bimodal IT kills your culture and adds complexity

Bimodal IT is gaining acceptance at some multi-billion-dollar corporations but Forrester Research says it’s the wrong approach at a time when customer preferences for digital technologies are forcing companies to move faster.

CIOs practicing bimodal IT are making a strategic mistake. They split their IT department's focus and take their eye off of the crucial goal of winning new business in the digital age. That's because creating a two-class system in which companies slowly builds stability in back-office systems while rapidly rolling out digital products does not support the broader business, process and organizational changes required to augment the customer experience, says Forrester Research.

"[Bimodal IT] works against the key principles of customer obsession," says Sharyn Leaver, a Forrester analyst who counsels CIOs. "[Customer-led business technology] unanimously needs to be done in this connected way across every organization. Bimodal does the complete opposite of that, basically saying that we're going to have two different organizations operating in very different ways and have different goals." Companies must instead work quickly to put customers at the center of their technology strategy, Leaver says.

Why bimodal is just a trendy Band-Aid

Achieving this new customer-centric focus is no mean feat. Digital technologies have CIOs and CEOs scrambling to differentiate themselves from competitors while meeting customers’ expectations and preferences for how they interact with corporate brands. Companies recognize that traditional IT delivery, conducted in stages can’t cultivate the crisp innovation required. Multi-billion-dollar corporations such as Ford Motor and Avnet are retooling around bimodal IT.

Bimodal IT can be a seemingly sensible Band-Aid to help companies shed the lethargy associated with rigorously documented and monolithic IT systems. But it can also create a troublesome schism between IT groups competing for funding, resources, skills and, most importantly, the attention of the business, says Forrester analyst John McCarthy, who interviewed executives at General Electric, Hewlett Packard Enterprise and UBS for his report, “The False Promise of Bimodal IT.”

McCarthy says that bimodal further isolates IT from business functions by relegating change management responsibilities solely to IT. Rather, product development, ecommerce and customer experience groups most augment their product and portfolio management skills and methodologies in the digital era. “Without those investments in business skills, bimodal IT will only widen the gulf between the CIO and the business,” McCarthy says.

Bill Ruh, chief digital officer at GE Digital.

Digitally savvy companies eschew bimodal for speedy IT

Some companies recognize this and have restructured for the digital age.

General Electric in 2015 jettisoned its own bimodal organization and united its IT and digital groups under GE Digital, led by chief digital officer Bill Ruh. He tells CIO.com the problem organizations run into creating bimodal systems is the stigma that the mode 1 group operating back-office systems is slower than the mode 2 unit building digital technologies. Employees may not want to work on mode 1 because of the perception that it is not innovative. That creates a dangerous culture that could lead to competing architectures.

"To be a digital company, you have to master both simultaneously to make it all work together," Ruh says. "We found it was the only way to bring together all of the digital capability under one [group] is the only way you begin to get to the point where you have two separate groups architecting their future."

Shawn Wiora, CIO of Creative Solutions in Healthcare.

Creative Solutions in Healthcare focuses on innovation by operating its entire infrastructure in the cloud (unheard of in healthcare) and experimenting with Internet of Things and drones, says Shawn Wiora, CIO of the $500 million nursing care facilities provider. He says the company aims to be as innovative as anyone in the marketplace because competition won't allow it to rest on its laurels. And the approach helps him win IT talent "We don't stay in the bimodal atmosphere," Wiora says. "We've got to be at the leading edge to stay competitive."

McCarthy says that CIOs need a business technology strategy that holistically makes the changes required to drive simplicity. That strategy must be driven from the top, with the CEO and the board of directors continuously learning about new digital experiences and ensuring that IT and business teams pull in the same direction. This strategy pairs design thinking (i.e., what is the customer experience like?) with agile development methodologies, implements more modern application and cloud architectures and leverages software with analytics and sensors to collect customer insights.

"At some point you have to start to change the culture of IT, whether it's the creation of a digital group or an ecommerce group," McCarthy says. "But the question is how long do you want to keep these things going separately and that's what we're really challenging. There's more than just creating a fast IT group. There's a fundamental transformation going on that supports the fundamental transformation of the business."